Great – we made money yesterday on the pair, but let’s not rest on our laurels, as we have another opportunity today. However before we get carried away, remember that we have interest rate decisions in both Europe and the UK today, and details of both can be found on some of my other sites if you follow the links – pounds to dollars and euro to dollar. Naturally both of these are important announcements, and whilst the rate changes may have already been factored in to the market, the ECB statement is always interesting, and often brings volatility to the currency, particularly in the question and answer session that follows the formal statement.

The candle of yesterday provided us with a nice three candle pattern of an up bar on Monday, followed by a doji cross on Tuesday, and yesterday’s wide spread down bar, indicting a typical turn from the reversal of Monday, and re-establishing the downwards trend from the high of late December. My suggestion for today is to try small short positions, but with wide stops if you intend to trade through the news, and I would suggest a stop loss in the region of 0.9200.

The short term outlook is bearish, the medium and long term is sideways.